Despite FTX collapse, the supremacy of centralized platforms over their decentralized counterparts will persist. Analysts at JPMorgan concluded this, CoinDesk reports.
As justification, analysts pointed to the substantial dependence of DEX on CEXs. In their view, it will take a long time for price discovery to move from centralized to decentralized exchanges.
The bank’s strategists noted that lower transaction-processing speeds, asset-pooling technology, and order-tracking capabilities are likely to restrict participation by institutional clients.
As additional obstacles to broader popularisation they cited the absence of stop orders, the use of blockchain oracles, vulnerability to hacks, exploits, the need for over-collateralization and the systemic risks associated with cascading automatic liquidations.
The balance of risk/reward in DeFi-protocols is harder to assess, — the analysts wrote.
The FTX collapse and the subsequent shift of users toward decentralized exchanges has been widely seen as a loss of trust in centralized intermediaries and the start of a long-term shift toward \”democratized finance\”.
While acknowledging the recent rise in index-trading volumes, JPMorgan questioned the durability of the trend.
\u201cDespite a rise in the DEX share of total cryptocurrency trading activity in recent weeks, this is most likely a reflection of the price crash and the decline in the share of borrowed funds/automatic liquidations following the FTX collapse,\u201d — the strategists said.
In November, the pace of monthly outflows of bitcoins from exchange balances to cold wallets 106 000 BTC, according to Glassnode.
Against the backdrop of events around FTX, hardware-wallet makers reported record sales.
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